Japan Vows To Wean Economy From Exports

April 15, 1986|By KNT News Service

WASHINGTON — Japan's prime minister pledged Monday to restructure his country's economy in an effort to reduce its trade surplus with the United States.

In his second meeting in two days with President Reagan, Yasuhiro Nakasone said Japan ''must tackle the epoch-making task of . . . transforming its economic structure into one dependent on domestic demand, rather than exports.'' He said that would significantly increase imports, particularly manufactured products.''

At the same time Nakasone urged Reagan to do a better job in promoting U.S. exports to Japan. He noted that even though the value of the U.S. dollar has fallen in relation to the yen, U.S. exports still continue to lag well behind Japanese imports. A lower-valued dollar, economists say, should lead to lower prices of U.S. products and thus more demand for them in Japan.

Nakasone said he has established a new agency to promote structural changes in Japan's economy and to set milestones for achieving them. He said the full transformation would take a long time, but he predicted that the first ''tangible results'' would be visible as early as fall.

As a result of changes already made, he said, Japan's export volume last month declined 2 percent from March 1985, although most of that shift has benefitted South Korea, Taiwan and Hong Kong rather than the United States, whose trade deficit with Japan continues to rise.

Despite overlapping defense and foreign policy interests, the United States and Japan have been jousting bitterly for several years about Japan's mounting trade surplus. This year alone the surplus is expected to reach nearly $50 billion.

Japanese imports such as automobiles and electronic appliances have flooded the U.S. market and led to widespread unemployment. That has spawned increasing resentment in hard-hit regions of the country and prompted Congress to threaten economic reprisals.

Reagan and Nakasone, after a White House meeting Monday, vowed to resist protectionism and professed their commitment to free trade.

But the structural differences between the two nations' economies, even if all import barriers on both sides were removed, practically guarantee continued dominance by Japan in trade relations.